Planning for Tourist Lodging on Lake Whatcom

Tani Sutley is a long time resident of Lake Whatcom as her family first moved to the lake in 1951. She enjoys local history, forestry and restoring stream habitat. Within the last two years several neighbors started transient lodging businesses within shorelines and she tried working with Planning and Development Services and Ecology to determine the zoning laws governing lodging in the watershed.

Whatcom County currently has many vacation rentals listed on VRBO.com and other online lodging sites. Owners, according to county staff, are operating vacation rentals as a business use of a second seasonal home, accessory dwelling or apartment or an investment property and assume they are just renting their property, much like a rental to a long term renter who works and lives in the area. Unlike the over 30-day definition for long-term rentals, short-term rentals are not regulated by the Landlord Tenant Act but do require lodging tax collection by the Department of Revenue.

Consequently, at times there have been several families vacationing in one unit, late night noise, increased traffic and other disturbances.

The county first considered regulation of vacation rentals when residents on the North Shore of Lake Whatcom in the summer of 2013 noticed frequent renters with large groups were using three properties on a small private road. Clarification of existing laws governing the commercial use of residential homes was requested from Planning and Development Services. Their response has maintained that: “Whatcom County’s zoning code currently does not list vacation rental units as a distinctive land use” as per PLN2014-00020 Planning and Development Proposed Amendments dated Dec. 1, 2014. It was proposed to make vacation rentals legal as a residential use of the property.

In a Bellingham Herald interview, Royce Buckingham, as attorney for Planning and Development Services said, “Vacation rentals are a generally accepted part of the communities and the economies of Birch Bay and Glacier. But at Lake Whatcom, council might conclude that some restrictions need to be put in place. They’ve become big enough that they are actually an annoyance to neighbors and a problem in some ways,” Buckingham said.

On Jan. 8, the Whatcom County Planning Commission held a public hearing to review proposal PLN2014-00020. As written, the proposal would amend existing law to make vacation rentals rented for less than 30 days accessory use anywhere a single family residence exists – but with required standards. Our mostly conservative commissioners rejected the proposal and cited a lack of sheriff’s reports to justify taking any action. Commissioner Ken Bell said he believed the proposal was “A solution in search of a problem.”

All of the vacation rental owners at the Jan. 8 public hearing insisted that regulations are unnecessary, that they already comply with all requirements for rentals of property. Comments can be read on the Planning Commission website under Agendas.

Commissioner David Hunter provided some perspective on the issue: “I want to try to figure out why we think this particular form of business should be treated in some significant way differently than bed and breakfast or rented properties of other kinds. What is it about the nature of these businesses that means they should be left entirely alone unlike all of these other kinds of businesses, which are very similar? I am baffled why we think that because they bring in taxes and they bring in tourists is a reason for treating them differently”.

“Now what we really are arguing is there is no reason to regulate Bed and Breakfast or rental properties generally then maybe you can make that argument but that’s not what is true today so I don’t understand why we are treating these differently.”

Our County Commissioners then voted to reject the proposed amendment and voted instead for a proposal to allow vacation rentals anywhere a single-family home is permitted with no standards. Commissioner Hunter was the sole vote opposed. The proposal will be sent back to the Whatcom County Council for review and consideration.

Existing Areas with Vacation Rentals

Clearly, Whatcom County has distinguished between short-term and long-term rentals for many years. Vacation rentals in Birch Bay and the Mt. Baker Recreational Region used for transient accommodations are not the same as long-term rentals. The primary use is for transient lodging.

In both Birch Bay and the Mt. Baker region, to operate property management companies must hold Health Department Transient Accommodation licenses, which require inspections, and state Department of Revenue business licenses in compliance with State laws. Those licenses are listed online on State license listings and some date back as far as 1995. This is not a new use. Whatcom County has benefited from the tax revenues from those areas for many years.

The Mt. Baker area has several previously zoned resort/recreational subdivisions in the Foothills subarea. Recreational subdivisions historically have limited seasonal occupancy, and some started with tent and RV camping with recreational facilities like swimming pools. These seasonal lots have been marketed to our Canadian neighbors and others for recreational or occasional use.

The cabins have a history of being rented to tourists needing overnight accommodations while on vacation in the Mt. Baker Recreation area. Although the units are platted as residential lots, most started as seasonal and vacation properties. 1

History of Resort/Recreational Subdivisions

Sudden Valley was designated a recreational subdivision in the May 20, 1997 Comprehensive Plan. The Lake Whatcom subarea recognized Sudden Valley, The Firs Bible Camp and Western Washington University’s recreation facility for recreational uses. Sudden Valley was originally designed as a resort and recreational community. They had small lots for recreational homes or cabins, a private marina and provided a campground and golf course as well as residential condominiums and homes.

Residential uses slowly replaced the campground, cabins and RV spots for year-round occupancy. Lot consolidation reduced the number of recreational lots. The tent and RV campground eventually closed from lack of use. Limited availability of Canadian recreational land contributed to the growth of such uses here in Whatcom County. Sudden Valley was able to expand when Water District 10 began providing public water and sewer. Demand for property there and in the Mt. Baker region was fueled by limited affordable land across the border in Canada.

In 2001, Sudden Valley proposed incorporating as a city. Whatcom County granted them status as a Provisional Urban Growth area until 2006 to explore the possibility. The intent was to determine if incorporation was possible to finance public services and facilities and environmental protection programs. (See Ordinance 2001-71)

Allowing such an expansion of growth in the watershed and reservoir for the City of Bellingham did not make sense. Chapter 2 of the Comprehensive plan continues to recognize Sudden Valley as a recreational development but assigns a Rural Community Designation or Type I LAMIRD in the Whatcom County Rural Element Update LAMIRD report dated June 10, 2013. LAMIRD designation is a limited area of more intensive development. 2

In addition to the recreational development at Sudden Valley, Lake Whatcom has had numerous resort uses. The only one remaining is Wildwood Resort, which replaced its campground with cabins permitted through a park modeling exemption in 2010. It is now advertising recreational use of the 83 sites for 180 days of the year for seasonal use only. It also received approval for a limited residential component with no limitation on occupancy. They were allowed expanded moorage for motorboats.

As Whatcom County struggles to control the effects of existing development on the lake’s water quality, so must it address the expanding use of unregulated residential homes being used for tourist lodging around the lake. Nightly rentals of vacation homes within shorelines have essentially the same impacts as resorts and recreational developments without the location designation. They offer recreational opportunities not found in city residential neighborhoods and expand the use of boats and many more people on the lake as they can invite friends to use the property as well. Unlike residential use where the owner is at work five days of the week, nightly rentals result in intensive daily use in the summer. When areas have concentrations of available tourist homes, the use essentially becomes resort /recreational uses.

Goals and Planning for Tourist Lodging

Our County needs to address the consequences of new recreational development in the watershed. Single-family residential homes are intended for one family who work and live in the area. That is well known as the primary use. Vacation rentals are often rented to multiple families to make the unit affordable since the nightly rental fee often exceeds $500 on Lake Whatcom. While creating profits for owners and investors, such “rentals” ignore existing regulations and building standards for residential housing and the underlying zoning for one single family is abused.

In the past, homes on Lake Whatcom were smaller and more affordable. As those homes were replaced by mega-mansions and homes built to fill the lots to maximum building size limits, available homes affordable to new families were not on the market. Investors are purchasing the remaining homes and hoping for enough tourists to pay for their investment. For older residential neighborhoods, this new use can create problems. Families like to know who their neighbors are and enjoy the quiet. Most of Lake Whatcom was rezoned in 2011 for one dwelling per five acres to be compliant with the Growth Management Act, but existing homes still reflect higher density with mostly one-acre or less lot sizes.

With existing lakeside homes being used for vacation rentals, the expanded recreational uses may involve the use of their boat launch, moorage, swimming, boating, biking, lakeside parties and campfire gatherings.

Current vacation rental homes on Lake Whatcom avoid all environmental reviews, costs and delays of commercial permitting, and conduct businesses for small scale recreational or tourist uses mostly within the shoreline designations and without a shorelines substantial development permit. All are currently enforced in Whatcom County only by complaints involving “disorderly house” provisions of WCC 9.40.

Vacation rental guests pay their online fees and don’t ask if the homeowner is operating legally or if they carry commercial insurance protection. They can also invite friends to visit them and use the recreational facilities further expanding existing residential permitted uses. If clusters of homes become short-term vacation rentals, the primary use is no longer residential and becomes commercial use.

Returning Lake Whatcom to the recreational and resort uses of a past generation on Lake Whatcom does not match the goals for cleaning up the lake’s current low oxygen, algae, phosphorus and fecal bacteria problems. While commercial and recreational uses on the lake may have had a small impact in its earlier settlement days, all impacts must now be examined for cumulative impacts.

At a Sept. 16 Planning and Development Committee meeting to discuss possible regulation options for vacation rentals, County Council Member Pete Kremen’s comments were recorded by committee minutes:

“Kremen stated any policy should require a VRBO to follow standards for legal reasons and to have adequate utility capacity, including sewage, electricity, water, and all other utilities. If there is a complaint or reason for inspection, they would be out of compliance, be shut down, and may have to pay a fine, especially in the Lake Whatcom watershed. The use shouldn’t be allowed in the Lake Whatcom watershed”.

From the County Executive website, Jack Louws has set clear goals for Whatcom County “to improve the vitality of our community and the health of our families; and to deliver effective customer service oriented government.”

Now is also a good time for him to also consider the costs of returning Lake Whatcom to the recreational and resort uses of a past generation.